UK mobile giant Vodafone has criticised plans by Indian group Essar to carry out a reverse listing of its telecom business as it may affect their joint venture Vodafone Essar. Essar is looking to merge unlisted Essar Telecommunications, which owns an 11%…
UK mobile giant Vodafone has criticised plans by Indian group Essar to carry out a reverse listing of its telecom business as it may affect their joint venture Vodafone Essar.
Essar is looking to merge unlisted Essar Telecommunications, which owns an 11% stake in Vodafone Essar, with listed India Securities (ISL).
But according to Vodafone, ISL is a highly illiquid vehicle, with more than 95% of the shares under the control of Essar Group. Accordingly, small amounts of buying or selling could distort ISL’s share price, it said in a statement.
The British telco added that such a reverse listing could be misinterpreted as a fair market value of Vodafone Essar, adding it did not wish a company in which it holds a majority interest to become the subject of a false market.
But in a notice to the Bombay Stock Exchange, ISL hit back saying that has no locus standi to oppose it since it is neither a shareholder nor a creditor of both Essar Telecommunications and ISL.
